History of Fair Trade
The history of Fair Trade can roughly be divided into four waves:
In the beginning the need for an alternative trade concept was acknowledged
after the end of the Second World War when charity organizations in
Western Europe began to establish trade with producers in Eastern Europe.
point mainly handicrafts were imported in order to support their economic
recovery. Concurrently, awareness was raised by the Mennonite
Central Committee which began to import embroidery from Puerto Rico
that was sold through the Self Help Crafts of the World organization
known as Ten Thousand
Following these early pioneers, more and more alternative trading
organizations (ATOs) came into being such as Gepa in
Germany and Traidcraft in
Great Britain. Some of them had a religious mindset, others were based
in community organizations that believed in using a business mindset
to address some of the social problems worldwide. These shops gave
the producer the possibility to trade directly with the companies,
thus cutting out the middlemen who are responsible of reducing prices
the producer. The sale mostly worked through world shops and special
The third wave of development promoted Fair Trade products to a larger
consumer base by involving sympathetic retail businesses. Among the
first cooperative businesses were Wild Oats Markets in the US and the
Co-operative Group in Great Britain.
The integration of Fair Trade products into mainstream shopping culture
was facilitated by the introduction of Fair Trade certification. During
this time, traditional players such as Sainsbury’s or Starbucks
were encouraged to enter the market. However, they remain up to this
partly Fair Trade (Dean's Beans). It is also worth mentioning the
emergence of supermarket own-label Fair Trade products such as Tesco in
Fair Trade sales are growing fast worldwide from 21% in 2002 to more
than 40% in 2003 for Fair Trade labeled products (FLO, 2003).
Fair trade has developed into a European success story as the recent
Trade in Europe 2005 - Facts and Figures on Fair Trade in 25 European
countries, carried out by Jean Marie Krier, and published
by the Fair Trade Advocacy Office in Brussels, shows. Sales in Europe
have been growing at an average of 20% per year since 2000. The annual
net retail value of Fair Trade labeled products now exceeds € 660
million in Europe. The figures, which have doubled since five years
ago, show that Fair Trade is now one of the fastest growing markets
world. More than 2,800 Worldshops across Europe, that stock almost
exclusively Fair Trade products that are imported by 200 Fair Trade
organizations, work with about 100,000 volunteers all over Europe.
Furthermore, Fair Trade is integrated into mainstream shopping
culture with 55,000 supermarkets all over Europe offering their customers
products. 47% of all bananas, 28% of the flowers and 9% of the sugar sold
in Switzerland are Fair Trade labeled. In the UK, a market with eight
population of Switzerland, these products have achieved a 5% market share
of tea and a 20% share of ground coffee.
If the US market development follows the European global sales of Fair Trade
products, it will most likely increase by a factor of 10 -15, topping $1.8
billion by 2007 according to D. Demetriou who’s article “Consumers
embrace ethical sales, costing firms £2.6bn a year”, was published
in The Independent, on December 9, 2003.
The increase in the market for Fair Trade is due to an interrelated
net of political, academic, cultural and informational influences.
The growing political impact of Fair Trade groups has become visible
at both national and international level. The symposium on Fair Trade,
part of the
2004 UN Conference on Trade and Development (UNCTAD) meeting that took place
in São Paulo, generated the São Paulo Trade Declaration that
actively challenged UNCATD to support the management of world commodity markets
and encourage increased trade price stability.
One of the most significant influences is the evolution of the consumer’s
consciousness, the movement of ethical consumerism. The key criteria for
successful brands have changed from the pragmatic price- and value-driven
towards real values, from Tesco to Body
Shop. Moreover, it has become widely
acknowledged that neither development aid nor foreign direct investment (FDI)
are sufficient to balance the inequalities between the North and the South.
Kofi Annan referred to the idea of “Trade not aid” as an excellent
way to alleviate poverty in the article “A route out of poverty”,
The Financial Times, March 5, 2001.
The Fair Trade movement gives one example
of how this can work. Fair Trade has undoubtedly expanded into a worldwide
movement, benefiting more than five million producers, their families, and
communities in developing countries.
For more information please refer to:
Nicholls, A. & Opal, C. (2004) Fair Trade Market-Driven Ethical
Consumption. London: Sage. Chapter 1.
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by Marcia C. Schenck, South Africa 2003 & 2006